The Shell group, a major player in the global energy sector, announced that the performance of its gas division for the fourth quarter of 2024 will be marked by a significant decline. This decline is attributed to the expiration of certain hedging contracts and a reduction in production volumes. These factors are expected to result in significantly lower results than those recorded in the third quarter of the same year.
The official publication of the financial results for the fourth quarter and full year 2024 is scheduled for January 30. This announcement comes after Shell already posted, in the third quarter, a sharp drop in net profit of 4.3 billion dollars, compared to 7 billion over the same period in 2023. This decline was partly due to reduced refining margins and lower oil prices.
An evolving trend
Despite the anticipated decline in the gas sector, the group offset certain difficulties in the third quarter thanks to an increase in production volumes in this activity. However, this positive dynamic seems to have reversed for the end of the year, reinforcing investors’ concerns.
On Wednesday morning, after the opening of the London Stock Exchange, Shell shares recorded a slight drop of 0.97%, standing at 2,591.50 pence. Fluctuations in European gas prices, which briefly exceeded the 50 euros per megawatt hour mark in December 2024, do not seem to have been enough to stabilize the company’s performance.
-Shareholder pressures
At the same time, Shell is facing increased pressure from its institutional shareholders. Several British pension funds have tabled a resolution asking the group to clarify the basis of its growth strategy for liquefied natural gas (LNG). This request also aims to assess the consistency of this strategy with the climate commitments made by the company.
In recent months, Shell has scaled back some of its climate targets, following a similar trend to BP. This strategic shift towards hydrocarbons, aimed at maximizing profits, has drawn criticism from environmental activists. In December, Shell also announced the end of its offshore wind development projects, marking a turning point in its energy strategy.
A delicate position
This posture by Shell reflects a difficult balance between the expectations of investors, who want high financial returns, and societal pressures for an accelerated energy transition. As the group navigates a complex economic and political environment, its strategic choices will have long-term repercussions on its positioning in the global energy industry.
